Drilling aluminum

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Since machine shop was mentioned it is likely the case they will charge you almost the cost of a cheap bench top drill press. You can pick one up from a local (hopefully) harbor freight for $40 or so. I have used mine to drill out dozens of knobs from 6mm to 1/4" without difficulty. I use isopropyl alcohol (70%) as a lubricant, it's not as messy as oil and leaves little residue.

I prefer cobalt bits, but HSS bits are good too, medium speed setting. Mount the knob in a chuck if possible, I don't recommend holding it as accidents can happen. Go slowly, even so the bit will likely grab and more or less rip the material out. (Still works fine)
 
A very slow feed, and high drill speed will be your best bet, do this a lot, electronics less. A low speed will just grab. Some light oil wouldn't hurt, but should be ok without.
In order to spare the finish on the knob, I would use some pieces of wood against the vice, at least a rag if you can't get some wood bits. If you don't have a vice, or a means to hold the part, I don't recommend doing it really.
And to practice doing the same manuever a few times so you are comfortable golding the drill straight would help too.

Good luck!
 
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Take a 3/16" wood dowel piece 3" long. Cut a slit in one end 1/2" deep. Put a piece of fine sand paper 1/2" x 5/16" in the slot. Chuck the unsloted end in your hand drill. Carefully bend the sand paper over and insert into the knob. Run the drill a few seconds to polish the inside of the knob. Check for fit.

A machinist would chuck the knob in a lathe and mount a 1/4" end mill in the tail stock. That's right rotate the work not the bit. An end mill will cut close to square shoulders.
 
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A rotating file or a small milling bit are nice to adjust small holes.
The can be fitted in a hand drill.
A Dremel kit works well for such things to.

The reason for using lubricant in this case is that some aluminium alloys may stick to the tool.

Figge
 

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Isoproponal alcohol and water as a lubricant works great for machining ali. I had a 2.5D CNC that had a feed for iso/water lubricant. Oil can be to clingy and cause the metal to stick to the bit.
Would water on its own work, what is the purpose of the alcohol here? I've drilled aluminium using oil, found it made such a mess and caused clinging as you say, I stopped and did it dry, worked well even on 3mm using cone drill.
 
The trick to machining aluminum is to not get it hot. Annealed aluminum sticks to anything you are trying to cut it with. Some alloys are worse than others. Water will work as a coolant. Alcohol cools even better due to evaporation. Oils work well if you want something that clings to a cutter, this is usually better for lower speed cutters.

To successfully cut any material you need to control both the cutting edge surface speed and the feed rate. With a drill bit the feed rate is controlled by the relief angles of the drill bit normally. You may be able to control this better with a drill press but it's still not ideal. Most reamers need to be manually fed, this is why I suggest using them. They work best in through holes, but will work fine in a blind hole. There are reamers with reversed flutes to remove the chip out the top of the hole but they are usually considerably more expensive. A normal chucking reamer will work fine for occasional use with a cordless drill in low gear, just remember to pull the reamer out often as you cut to remove the chips. If the flutes fill up things get hot and turn to glue fast.

A customized drill bit as Elvee suggests will work. You basically need to remove most of the relief angle from the bit so it doesn't dig in. Cranking the drill bit by hand doesn't help with the feed rate issue. It just allows you to stop cutting before the part rips out of the vice and flys across the room. You would still need to control the feed rate. You may get away with this in some cases depending on material type and amount removed, but it would still work better with a proper cutter.
 
Would water on its own work, what is the purpose of the alcohol here? I've drilled aluminium using oil, found it made such a mess and caused clinging as you say, I stopped and did it dry, worked well even on 3mm using cone drill.

I don't think it is advisable to use water on its ownf The lubricant was supplied in gallon drums by the company that did the CNC machine, I believe they use de-ionised water.
There was also a feed for heavier oils for curring steal etc. once turned the wrong one on and used Rocal instead of ISO, the swarf stuck to everything and created a mess.
RPM and feed speeds are important as are the types of drills and milling bits, a bit rusty on all this these days as I don't get the same hands on as I used to, use to machine plasics as well that is fun, especially nylon based plastics.
 
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Wrap-up

Not sure there was a consensus, but the thread certainly explored the entire gamut of possibilities.

I took it to a machine shop. They said they said it was no big deal; they'd just open it up with a drill press; said come back in an hour. Clean job, smooth bore, no scratches, no headaches. I didn't get to see how they did it, but I think they probably used oil as a coolant because the knob (black anodized) was a little shinier coming out that going in. I used a little machine oil on the second knob, and now they're both the same. $10.

Thanks for the ideas, advice, and discussion.
 
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